- The sports activities betting inventory had a tough 2025.
- DraftKings is the one gaming title on the financial institution’s checklist of practically 60 fairness concepts for 2026.
DraftKings (NASDAQ: DKNG) inventory endured a forgettable 2025, slumping 6.53% whereas the S&P 500 gained practically 17%, however some market observers consider the brand new yr will deliver higher issues for shares of the sportsbook operator.
DraftKings is one in all J.P. Morgan’s high inventory concepts for 2026. (Picture: Shutterstock)
DraftKings is one in all 57 shares on J.P. Morgan’s high concepts checklist for 2026 and one in all a number of from the patron discretionary sector, nevertheless it’s the one gaming title within the group. The financial institution charges DraftKings “chubby” with a value goal of $42, implying upside of greater than 20% from the place the inventory at the moment resides.
J.P. Morgan highlighted a number of traits possessed by corporations on its 2026 high concepts checklist, together with robust stability sheets and administration groups with robust information of capital allocation and benefiting from business consolidation.
DraftKings’ stability sheet is stable and the corporate has beforehand used bolt-on acquisitions to bolster its know-how stack and enter new industries, corresponding to web lottery and prediction markets. Talking of prediction markets, the operator lately launched DraftKings Predictions and that may check administration’s operational acumen in 2026.
DraftKings Inventory May Profit from ‘Ok-Formed Economic system’
In 2026, DraftKings may gain advantage from a “k-shaped economic system” — the state of affairs during which totally different elements of the economic system get well at various charges following durations of malaise.
What precisely this implies depends upon how the mixture macroeconomic information is damaged out to counsel the Ok-shaped profile,” according to Investopedia. “It could imply that some industries shortly return to robust progress in output whereas others see declining exercise, or that some varieties of asset values rise whereas others proceed to fall, or that some segments of society see growing wealth and revenue whereas others lose wealth and revenue. It may additionally imply different prospects.”
Particular to DraftKings, a Ok-shaped restoration may gain advantage the gaming firm if revenue ranges and wealth results enhance amongst prosperous bettors.
Likewise, the corporate may gain advantage from a possible resurgence amongst middle-income shoppers as tax breaks in President Trump’s One Large Stunning Invoice Act (OBBBA) take form. Subsequent yr would be the first during which perks corresponding to no taxes on time beyond regulation and suggestions are in impact.
DraftKings Spending Plans in Focus
J.P. Morgan notes buyers ought to be conscious of corporations’ capital return plans in 2026, mentioning that dividends and share repurchase packages could possibly be drivers of share value performances. Concerning DraftKings, it’s unlikely the gaming firm turns into a dividend payer subsequent yr, however in November it doubled the scale of its buyback program to $2 billion from $1 billion.
Corporations aren’t legally obligated to purchase again inventory just because they make associated bulletins and whereas DraftKings has nibbled at its shares since its first repurchase plan was unveiled, analysts and buyers will probably be monitoring how prediction markets expenditures have an effect on the operator’s shareholder rewards plans in 2026.
